Private Equity “Is Everywhere In Beer,” Sez First Bev’s Bill Anderson

INSIGHTS Express:

Interesting blog post by First Bev ceo Bill Anderson who sez that recent deal by Fireman Capital (private equity firm in Boston) to buy majority of Utah Brewers Cooperative for reported $35 mil “is just the latest sign that private equity has emerged as a significant source of capital in the beer industry.” He points to NAB acquisition by KPS as “the best example of a PE dollars and a PE mindset coming into the industry. They reduced costs, drove efficiencies across all brewing operations and now are reportedly selling after owning the assets for less than four years.”

Then too, “private equity may continue to hit the middle tier,” said Bill. Pointed to Byron Trott’s BDT Capital and the firm’s “unusual” deal for 70% of City Bev as well as pending acquisition of Columbia by Meritage. Meritage “isn’t private equity by design” since a “family office doesn’t have the built in investment deadlines of private equity firms,” oft-criticised for short term investment horizons.

“All of these deals are just the start,” notes Bill. Other investors-PE, family offices and high net worth investors – will continue to be “highly attracted to this industry given craft’s extraordinary growth rates.” Both distribs and crafties “need to find good large streams of new capital,” contends BIl. “Whether or not the new capital coming is smart and patient-or not-will make all the difference.”